Part 1 National Health Service, etc

NHS bodies and their functions: England

1 English Health Authorities: change of name

(1) On and after the date on which this section comes into force, Health Authorities for areas in England are to be known instead as Strategic Health Authorities.

(2) Accordingly, for section 8 of the National Health Service Act 1977 (c. 49) (in this Act referred to as “the 1977 Act”) (establishment and abolition of Health Authorities) there is substituted—

“8 Health Authorities and Strategic Health Authorities

(1) It is the duty of the Secretary of State to establish, in accordance with Part 1 of Schedule 5 to this Act, authorities to be called—

(a) Strategic Health Authorities, in the case of authorities established for areas in England;

(b) Health Authorities, in the case of authorities established for areas in Wales.

(2) Subject to subsection (4) below—

(a) a Strategic Health Authority shall be established for such area of England as is specified in the order establishing the authority; and

(b) a Health Authority shall be established for such area of Wales as is so specified, or, if the order so provides, for the whole of Wales.

(3) A Strategic Health Authority or a Health Authority shall be known by such name, in addition to the title “Strategic Health Authority” or “Health Authority”, as—

(a) appears to the Secretary of State appropriately to signify the connection of the authority with the area for which they are established; and

(b) is specified in the order establishing the authority.

(4) The Secretary of State may by order—

(a) vary the area of a Strategic Health Authority or Health Authority;

(b) abolish a Strategic Health Authority or Health Authority;

(c) establish a new Strategic Health Authority or Health Authority;

(d) change the name by which a Strategic Health Authority or Health Authority are known.

(5) No order shall be made under this section relating to a Strategic Health Authority until after the completion of such consultation as may be prescribed.

(6) Consultation requirements contained in regulations under subsection (5) are in addition to, and not in substitution for, any other consultation requirements which may apply.

(7) The Secretary of State shall act under this section so as to ensure—

(a) that the areas for which Strategic Health Authorities are at any time established together comprise the whole of England;

(b) that the areas for which Health Authorities are at any time established together comprise the whole of Wales; and

(c) that no area for which a Strategic Health Authority or a Health Authority are established extends both into England and into Wales.

(8) The power to make incidental or supplemental provision conferred by section 126(4) below includes, in particular, in its application to orders made under this section, power to make provision for the transfer of staff, property, rights and liabilities.”

(3) Schedule 1 (which contains amendments consequential upon this section) is to have effect.

2 Primary Care Trusts

(1) Section 16A of the 1977 Act (which provides for the establishment of Primary Care Trusts) is amended as provided in subsections (2) and (3).

(2) For subsection (1) there is substituted—

“(1) It is the duty of the Secretary of State to establish bodies to be known as Primary Care Trusts for areas in England with a view to their exercising functions in relation to the health service.

(1A) The Secretary of State shall act under this section so as to ensure that the areas for which Primary Care Trusts are at any time established together comprise the whole of England.”

(3) In subsection (3), after “the area” there is inserted “of England”.

(4) Schedule 5A to the 1977 Act (which makes further provision about Primary Care Trusts) is amended as follows—

(a) in paragraph 2(3)—

(i) for “the Health Authority in whose area a Primary Care Trust is established to meet the costs” there is substituted “a Strategic Health Authority whose area includes any part of the area of a Primary Care Trust to meet costs”, and

(ii) in paragraph (b), after “meet” there is inserted “(or to contribute towards its meeting)”,

(b) in paragraph 2(4), for “the Health Authority in whose area a Primary Care Trust is established” there is substituted “a Strategic Health Authority whose area includes any part of the area of a Primary Care Trust”,

(c) in paragraph 16(1), for “the Health Authority within whose area the trust’s area falls” there is substituted “each Strategic Health Authority whose area includes any part of the trust’s area”, and

(d) in paragraph 16(3), for “the Health Authority within whose area the trust’s area falls” there is substituted “any Strategic Health Authority whose area includes any part of the trust’s area”.

(5) Schedule 2 (which contains amendments of the 1977 Act and of other enactments to reallocate functions of Health Authorities to Primary Care Trusts and to make certain connected amendments) is to have effect.

3 Directions: distribution of functions

(1) The 1977 Act is amended as follows.

(2) In section 16D (Secretary of State’s directions: distribution of functions), in subsection (1), after “Special Health Authority” there is inserted “or a Primary Care Trust”.

(3) For section 17A (Health Authority’s directions: distribution of functions) there is substituted—

“17A Strategic Health Authority’s directions: distribution of functions

(1) A Strategic Health Authority may, in relation to any specified functions of theirs, direct a Primary Care Trust any part of whose area falls within their area to exercise those functions.

(2) But a Strategic Health Authority may not so direct a Primary Care Trust in relation to any functions of the Strategic Health Authority arising under section 28C arrangements if the Primary Care Trust is providing any services in accordance with those arrangements.

(3) The Secretary of State may direct Strategic Health Authorities that specified functions of theirs—

(a) are to be exercisable, or exercisable to (or only to) any specified extent, by Primary Care Trusts; or

(b) are not to be exercisable by Primary Care Trusts,

and that the power in subsection (1) above is to be exercised accordingly.

(4) Directions under subsection (3)(a) above may include directions that any of the specified functions are to be exercised (or exercised to or only to any specified extent) jointly with the Strategic Health Authority, or jointly by one or more Primary Care Trusts; but such directions may be given only if regulations providing for the joint exercise of those functions have been made under section 16 or 16B above.

(5) In this section, “specified” means specified in the directions.”

(4) In section 17B (Health Authority’s directions: exercise of functions), in subsection (1), the words from “which” to the end are omitted.

(5) In section 18 (directions and regulations under preceding provisions), in subsection (1A)—

(a) “or” is inserted after paragraph (a),

(b) paragraph (b) is omitted, and

(c) in paragraph (c), for “16D, 17 or 17A” there is substituted “16D or 17”.

4 Personal medical services, personal dental services and local pharmaceutical services

(1) In section 9 of the National Health Service (Primary Care) Act 1997 (c. 46) (relationship between Part 1 of that Act and the 1977 Act), after subsection (1) there is inserted—

“(1A) In subsection (1), the words from “, apart from” to “functions),” have effect only in relation to Wales.”

(2) In section 36 of the Health and Social Care Act 2001 (c. 15) (effect of the 1977 Act), after subsection (1) there is inserted—

“(1A) In subsection (1), the words from “, apart from” to “authority),” have effect only in relation to Wales.”

(3) Schedule 3 (which contains amendments of the National Health Service (Primary Care) Act 1997 and of other enactments related to the provisions of this section and sections 1 to 3) is to have effect.

5 Local Representative Committees

(1) Section 44 of the 1977 Act (recognition of local representative committees) is amended in accordance with subsections (2) to (7).

(2) Before subsection (A1) there is inserted—

“(ZA1) A Primary Care Trust may recognise a committee formed for its area, or for the area of that and one or more other Primary Care Trusts, which it is satisfied is representative of—

(a) the medical practitioners providing general medical services or general ophthalmic services in the Primary Care Trust’s area;

(b) those medical practitioners and the deputy medical practitioners for the Primary Care Trust’s area;

(c) the medical practitioners mentioned in—

(i) paragraph (a) above; or

(ii) paragraph (b) above,

and the section 28C medical practitioners for the Primary Care Trust’s area,

and any committee so recognised shall be called the Local Medical Committee for the Primary Care Trust’s area.”

(3) After subsection (A1) there is inserted—

“(A2) A Primary Care Trust may recognise a committee formed for its area, or for the area of that and one or more other Primary Care Trusts, which it is satisfied is representative of—

(a) the dental practitioners providing general dental services in the Primary Care Trust’s area;

(b) those dental practitioners and the deputy dental practitioners for the Primary Care Trust’s area;

(c) the dental practitioners mentioned in—

(i) paragraph (a) above; or

(ii) paragraph (b) above,

and the section 28C dental practitioners for the Primary Care Trust’s area,

and any committee so recognised shall be called the Local Dental Committee for the Primary Care Trust’s area.”

(4) After subsection (B1) there is inserted—

“(B2) Where a Primary Care Trust is satisfied that a committee formed for its area, or for its area together with the area of one or more other Primary Care Trusts, is representative—

(a) of the ophthalmic opticians providing general ophthalmic services in the Primary Care Trust’s area; or

(b) of the persons providing pharmaceutical services from premises in the Primary Care Trust’s area,

the Primary Care Trust may recognise that committee; and any committee so recognised shall be called the Local Optical Committee or the Local Pharmaceutical Committee, as the case may be, for the area of the Primary Care Trust.”

(5) In subsection (2), “with the approval of the Health Authority” is omitted.

(6) In subsection (3)—

(a) in each of paragraphs (a) and (c), before “Health Authority” there is inserted “Primary Care Trust or”,

(b) after paragraph (a) there is inserted—

“(aa) is a section 28C medical practitioner for the area of a Primary Care Trust if he is a medical practitioner who performs personal medical services in the area of the Primary Care Trust in accordance with arrangements made under section 28C above;”, and

(c) after paragraph (c) there is inserted—

“(ca) is a section 28C dental practitioner for the area of a Primary Care Trust if he is a dental practitioner who performs personal dental services in the area of the Primary Care Trust in accordance with arrangements made under section 28C above;”.

(7) In subsection (4), after “notified the” there is inserted “Primary Care Trust or”.

(8) Section 45 of the 1977 Act (functions of local representative committees) is amended as follows.

(9) After subsection (1) there is inserted—

“(1ZA) Regulations may require—

(a) Primary Care Trusts, in the exercise of their functions under this Part of this Act, to consult committees recognised by them under section 44 above,

(b) Strategic Health Authorities, in the exercise of any of their functions which relate to arrangements under section 28C above, to consult committees recognised under section 44(ZA1)(c) or (A2)(c) above by Primary Care Trusts for the area or areas where the personal medical or dental services are provided (or to be provided) under the arrangements,

on such occasions and to such extent as may be prescribed.”

(10) In subsection (1A)—

(a) for “power conferred by subsection (1) above is” there is substituted “powers conferred by subsections (1) and (1ZA) above are”, and

(b) after “require a” there is inserted “Strategic Health Authority, Primary Care Trust or”.

(11) In subsection (1C)—

(a) for “subsection (A1)(b) or (c) or (B1)(b) or (c)” there is substituted “subsection (ZA1)(b) or (c), (A1)(b) or (c), (A2)(b) or (c) or (B1)(b) or (c)”,

(b) before paragraph (a) there is inserted—

“(za) in the case of a committee recognised under subsection (ZA1)(b) or (c)(ii) of that section, to the deputy medical practitioners for the Primary Care Trust’s area;

(zb) in the case of a committee recognised under subsection (ZA1)(c) of that section, to the section 28C medical practitioners for that area;”, and

(c) after paragraph (b) there is inserted—

“(ba) in the case of a committee recognised under subsection (A2)(b) or (c)(ii) of that section, to the deputy dental practitioners for the Primary Care Trust’s area;

(bb) in the case of a committee recognised under subsection (A2)(c) of that section, to the section 28C dental practitioners for that area;”.

(12) In each of subsections (2) and (3), before “Health Authority”, in each place where it occurs, there is inserted “Primary Care Trust or”.

NHS bodies and their functions: Wales

6 Local Health Boards

(1) After section 16B of the 1977 Act there is inserted—

“16BA Local Health Boards

(1) The National Assembly for Wales may establish bodies to be known as Local Health Boards with a view, in particular, to their exercising—

(a) functions of Health Authorities transferred or to be transferred to the Assembly by order under section 27 of the Government of Wales Act 1998 (reform of Welsh health authorities),

(b) other functions of the Assembly relating to the health service.

(2) Each Local Health Board shall be established by order made by the Assembly (referred to in this Act as an LHB order), and an order may establish more than one Local Health Board.

(3) A Local Health Board shall be established for the area of Wales specified in its LHB order.

(4) If any consultation requirements apply, they must be complied with before an LHB order is varied or revoked.

(5) In this section, “consultation requirements” means requirements about consultation contained in regulations made by the Assembly.

(6) Schedule 5B to this Act (which makes further provision about Local Health Boards) shall have effect.

16BB Local Health Boards: functions

(1) The National Assembly for Wales may direct a Local Health Board to exercise in relation to its area any functions which—

(a) were exercised by a Health Authority in relation to any part of the same area, and

(b) have been transferred to the Assembly as mentioned in section 16BA(1) above.

(2) The Assembly may also direct a Local Health Board to exercise in relation to its area such other functions of the Assembly relating to the health service as are specified in the directions.

(3) The functions which may be specified in directions under this section include functions under enactments relating to mental health and nursing homes.

(4) The Assembly may give directions to a Local Health Board about its exercise of any functions.

(5) Directions under subsection (1) above must be given in regulations made by the Assembly; but other directions under this section and directions under section 16BC below may be given in such regulations or by instrument in writing.

16BC Exercise of functions by Local Health Boards

(1) This section applies to functions which are exercisable by a Local Health Board under or by virtue of section 16BB above or this section.

(2) The Assembly may give directions providing for any functions to which this section applies to be exercised—

(a) by another Local Health Board;

(b) by a Special Health Authority; or

(c) jointly with any one or more of the following: Health Authorities, NHS trusts, Primary Care Trusts and other Local Health Boards.

(3) Directions given by the Assembly may provide—

(a) for any functions to which this section applies to be exercised, on behalf of the Local Health Board by whom they are exercisable, by a committee, sub-committee or officer of the Board,

(b) for any functions which, under this section, are exercisable by a Special Health Authority to be exercised, on behalf of that authority, by a committee, sub-committee or officer of the authority,

(c) for any functions which, under this section, are exercisable by a Local Health Board jointly with one or more Health Authorities or other Local Health Boards (but not with any NHS trusts) to be exercised, on behalf of the health service bodies in question, by a joint committee or joint sub-committee.”

(2) Schedule 4 (which inserts the new Schedule 5B in the 1977 Act) and Schedule 5 (which makes other amendments relating to Local Health Boards) are to have effect.

(3) In section 126 of the 1977 Act (orders, regulations and directions)—

(a) in subsection (1)—

(i) after “PCT order” there is inserted “or an instrument made by the National Assembly for Wales”, and

(ii) in paragraph (b), after “Schedule 5A to this Act” there is inserted “, paragraph 19, 20 or 22 of Schedule 5B to this Act”,

(b) in subsection (3B), after “pursuance of” there is inserted “section 16BB or”,

(c) in subsection (4), for “section 18” there is substituted “section 16BB, 18”, and

(d) in subsection (4A)—

(i) the word “or” at the end of paragraph (b) is omitted, and

(ii) after paragraph (b) there is inserted—

“(ba) paragraph 9(3) of Schedule 5B to this Act, or”.

(4) Section 1 of the National Health Service (Private Finance) Act 1997 (c. 56) (powers to enter into externally financed development agreements) applies to Local Health Boards as it applies to NHS trusts.

Financial arrangements: England and Wales

7 Funding of Strategic Health Authorities and Health Authorities

(1) Section 97 of the 1977 Act (means of meeting expenditure of Health Authorities etc out of public funds) is amended as follows.

(2) Before subsection (1) there is inserted—

“(A1) It is the duty of the Secretary of State to pay in respect of each financial year to each Strategic Health Authority sums not exceeding the amount allotted for that year by the Secretary of State to the Authority towards meeting the expenditure of the Authority which is attributable to the performance by the Authority of their functions in that year.”

(3) In subsection (3C), after “any year” there is inserted “to a Strategic Health Authority under subsection (A1) above or”.

(4) In subsection (3D), after “given to” there is inserted “the Strategic Health Authority or”.

(5) In subsection (3F), after “any year to” there is inserted “a Strategic Health Authority or”.

(6) In subsection (5), after “allotted to a” there is inserted “Strategic Health Authority,”.

(7) In subsection (6)—

(a) after “directions to a” there is inserted “Strategic Health Authority,”,

(b) at the end of paragraph (a) there is inserted “or”, and

(c) paragraphs (bb) and (c) are omitted.

(8) Subsection (8) is omitted.

(9) In subsection (9), after “paid to” there is inserted “Strategic Health Authorities,”.

8 Funding of Primary Care Trusts

For section 97C of the 1977 Act (public funding of Primary Care Trusts) there is substituted—

“97C Public funding of Primary Care Trusts

(1) It is the duty of the Secretary of State, in respect of each financial year, to pay to each Primary Care Trust—

(a) sums equal to their general Part 2 expenditure; and

(b) sums not exceeding the amount allotted by the Secretary of State to the Primary Care Trust for that year towards meeting the Trust’s main expenditure in that year.

(2) In determining the amount to be allotted for any year to a Primary Care Trust under subsection (1)(b) above (or in varying the amount under subsection (7) below), the Secretary of State may take into account, in whatever way he thinks appropriate—

(a) the Trust’s general Part 2 expenditure; and

(b) expenditure which would have been the Trust’s general Part 2 expenditure but for an order under section 103(1) below,

during any period he thinks appropriate (or such elements of that expenditure as he thinks appropriate).

(3) Where the Secretary of State has made an initial determination of the amount (“the initial amount”) to be allotted for any year to a Primary Care Trust under subsection (1)(b) above, he may increase the initial amount by a further sum if it appears to him that over a period notified to the Trust—

(a) it satisfied any objectives notified to it as objectives to be met in performing its functions; or

(b) it performed well against any criteria notified to it as criteria relevant to the satisfactory performance of its functions (whether or not the method of measuring its performance against those criteria was also notified to it).

(4) In subsection (3) above, “notified” means specified or referred to in a notice given to the Primary Care Trust by the Secretary of State.

(5) In making any increase under subsection (3) above, the Secretary of State may (whether by directions under subsection (8) below or otherwise) impose any conditions he thinks fit on the application or retention by the Primary Care Trust of the sum in question.

(6) Where the Secretary of State has, under subsection (3) above, increased by any sum the amount to be allotted for any year to a Primary Care Trust and notified the Trust of the allotment and it subsequently appears to him that the Trust has failed (wholly or in part) to satisfy any conditions imposed in making that increase, he may—

(a) reduce the allotment made to the Trust for that year; or

(b) when he has made an initial determination of the amount (“the initial amount”) to be allotted for any subsequent year to the Trust under subsection (1)(b) above, reduce the initial amount,

by any amount not exceeding that sum.

(7) An amount is allotted to a Primary Care Trust for a year under this section when the Trust is notified by the Secretary of State that the amount is allotted to the Trust for that year; and the Secretary of State may make an allotment under this section increasing or reducing (subject to subsection (6) above) an allotment previously so made, and the reference to a determination in subsection (3) above includes a determination made with a view to increasing or reducing an allotment previously so made.

(8) The Secretary of State may give directions to a Primary Care Trust with respect to—

(a) the application of sums paid to it under this section, or

(b) the payment of sums by it to the Secretary of State in respect of charges or other sums referable to the valuation or disposal of assets.

(9) Sums falling to be paid to Primary Care Trusts under this section shall be payable subject to compliance with such conditions as to records, certificates or otherwise as the Secretary of State may determine.”

9 Funding of Local Health Boards

(1) After section 97E of the 1977 Act there is inserted—

“97F Public funding of Local Health Boards

(1) It is the duty of the National Assembly for Wales, in respect of each financial year, to pay to each Local Health Board—

(a) sums equal to their general Part 2 expenditure; and

(b) sums not exceeding the amount allotted by the National Assembly for Wales to the Local Health Board for that year towards meeting the Board’s main expenditure in that year.

(2) In determining the amount to be allotted for any year to a Local Health Board under subsection (1)(b) above (or in varying the amount under subsection (7) below), the National Assembly for Wales may take into account, in whatever way the Assembly thinks appropriate—

(a) the Board’s general Part 2 expenditure; and

(b) expenditure which would have been the Board’s general Part 2 expenditure but for an order under section 103(1) below,

during any period the Assembly thinks appropriate (or such elements of that expenditure as it thinks appropriate).

(3) Where the National Assembly for Wales has made an initial determination of the amount (“the initial amount”) to be allotted for any year to a Local Health Board under subsection (1)(b) above, the Assembly may increase the initial amount by a further sum if it appears to it that over a period notified to the Board—

(a) the Board satisfied any objectives notified to it as objectives to be met in performing its functions; or

(b) it performed well against any criteria notified to it as criteria relevant to the satisfactory performance of its functions (whether or not the method of measuring its performance against those criteria was also notified to it).

(4) In subsection (3) above, “notified” means specified or referred to in a notice given to the Local Health Board by the National Assembly for Wales.

(5) In making any increase under subsection (3) above, the National Assembly for Wales may (whether by directions under subsection (8) below or otherwise) impose any conditions it thinks fit on the application or retention by the Local Health Board of the sum in question.

(6) Where the National Assembly for Wales has, under subsection (3) above, increased by any sum the amount to be allotted for any year to a Local Health Board and notified the Board of the allotment and it subsequently appears to the Assembly that the Board has failed (wholly or in part) to satisfy any conditions imposed in making that increase, the Assembly may—

(a) reduce the allotment made to the Board for that year; or

(b) when the Assembly has made an initial determination of the amount (“the initial amount”) to be allotted for any subsequent year to the Board under subsection (1)(b) above, reduce the initial amount,

by any amount not exceeding that sum.

(7) An amount is allotted to a Local Health Board for a year under this section when the Board is notified by the National Assembly for Wales that the amount is allotted to the Board for that year; and the National Assembly for Wales may make an allotment under this section increasing or reducing (subject to subsection (6) above) an allotment previously so made, and the reference to a determination in subsection (3) above includes a determination made with a view to increasing or reducing an allotment previously so made.

(8) The National Assembly for Wales may give directions to a Local Health Board with respect to—

(a) the application of sums paid to the Board under this section, or

(b) the payment of sums by the Board to the National Assembly for Wales in respect of charges or other sums referable to the valuation or disposal of assets.

(9) Sums falling to be paid to Local Health Boards under this section shall be payable subject to compliance with such conditions as to records, certificates or otherwise as the National Assembly for Wales may determine.

97G Financial duties of Local Health Boards

(1) It is the duty of every Local Health Board, in respect of each financial year, to perform its functions so as to secure that the expenditure of the Board which is attributable to the performance by the Board of its functions in that year (not including expenditure within subsection (1)(a) of section 97F above) does not exceed the aggregate of—

(a) the amount allotted to it for that year under subsection (1)(b) of that section;

(b) any sums received by it in that year under any provision of this Act (other than sums received by it under that section); and

(c) any sums received by it in that year otherwise than under this Act for the purpose of enabling it to defray any such expenditure.

(2) The National Assembly for Wales may give such directions to a Local Health Board as appear to be requisite to secure that the Board complies with the duty imposed on it by subsection (1) above.

(3) Directions under subsection (2) may be specific in character.

(4) To the extent to which—

(a) any expenditure is defrayed by a Local Health Board as trustee or on behalf of a Local Health Board by special trustees; or

(b) any sums are received by a Local Health Board as trustee or under section 96A above,

that expenditure and, subject to subsection (6) below, those sums shall be disregarded for the purposes of this section.

(5) For the purposes of this section sums which, in the hands of a Local Health Board, cease to be trust funds and become applicable by the Local Health Board otherwise than as trustee shall be treated, on their becoming so applicable, as having been received by the Local Health Board otherwise than as trustee.

(6) Of the sums received by a Local Health Board under section 96A above so much only as accrues to the Local Health Board after defraying any expenses incurred in obtaining them shall be disregarded under subsection (4) above.

(7) Subject to subsection (4) above, the National Assembly for Wales may by directions determine—

(a) whether specified sums are, or are not, to be treated for the purposes of this section as received under this Act by a specified Local Health Board;

(b) whether specified expenditure is, or is not, to be treated for those purposes as expenditure within subsection (1) above of a specified Local Health Board; or

(c) the extent to which, and the circumstances in which, sums received by a Local Health Board under section 97F above but not yet spent are to be treated for the purposes of this section as part of the expenditure of the Local Health Board and to which financial year’s expenditure they are to be attributed.

(8) In subsection (7) above, “specified” means of a description specified in the directions.

97H Resource limits for Local Health Boards

(1) It is the duty of every Local Health Board to ensure that the use of its resources in a financial year does not exceed the amount specified for it in relation to that year by the National Assembly for Wales.

(2) For the purpose of subsection (1) above no account shall be taken of any use of resources for the purposes of a Board’s general Part 2 expenditure (within the meaning of paragraph 6A of Schedule 12A).

(3) But in specifying an amount for a Local Health Board under subsection (1) above (or in varying the amount under subsection (5) below), the National Assembly for Wales may take into account (in whatever way it thinks appropriate)—

(a) any such use of resources; and

(b) the use of any resources which would have been for the purpose of the Board’s general Part 2 expenditure but for an order under section 103(1) below,

during any period the Assembly thinks appropriate (or such elements of such uses of resources as it thinks appropriate).

(4) For the purpose of subsection (1) above the National Assembly for Wales may give directions—

(a) specifying uses of resources which are to be, or not to be, taken into account;

(b) making provision for determining to which Local Health Board certain uses of resources are to be attributed;

(c) specifying descriptions of resources which are to be, or not to be, taken into account.

(5) Where an amount has been specified under this section in respect of a financial year, it may be varied by a later specification.

(6) Subsections (4) to (6) of section 97G above shall apply in relation to the duty under subsection (1) above as they apply in relation to the duty under section 97G(1); and for that purpose references to the defraying of expenditure and the receipt of sums shall be construed as references to the incurring of liabilities and the acquisition of assets.

(7) The provisions in section 97G(2) and (3) above about the giving of directions by the National Assembly for Wales shall apply in relation to the duty under subsection (1) above as they apply in relation to the duty under section 97G(1).

(8) In this section a reference to the use of resources is a reference to their expenditure, consumption or reduction in value.”

10 Expenditure of NHS bodies

(1) The 1977 Act is amended as follows.

(2) In section 97 (means of meeting expenditure of Health Authorities etc out of public funds), in subsection (3BB), for “section 97C” there is substituted “sections 97C and 97F”.

(3) Schedule 12A to the 1977 Act (expenditure of Health Authorities and Primary Care Trusts) is amended as follows.

(4) In paragraph 3—

(a) in each of sub-paragraphs (1), (4) and (5), for “Secretary of State” there is substituted “National Assembly for Wales”,

(b) in sub-paragraph (1), for “he” there is substituted “it”,

(c) in sub-paragraph (4)—

(i) for “his discretion” there is substituted “its discretion”, and

(ii) for “his opinion” there is substituted “the Assembly’s opinion”, and

(d) in sub-paragraph (5), for “he” there is substituted “the Assembly”.

(5) In paragraph 4(2), the word “or” at the end of paragraph (a) is omitted, and after paragraph (a) there is inserted—

“(aa) remuneration referable to the cost of drugs,

(ab) remuneration paid to persons providing additional pharmaceutical services (in accordance with directions under section 41A above), in respect of such of those services as are designated, or”.

(6) In paragraph 5(1)—

(a) the “and” at the end of paragraph (a) is omitted,

(b) in paragraph (b), for “(other than general Part II expenditure),” there is substituted “(other than general Part 2 expenditure and remuneration referable to the cost of drugs), and”, and

(c) for the words following paragraph (b) there is substituted—

“(c) expenditure attributable to remuneration referable to the cost of drugs for which the trust is accountable in that year (whether paid by it or by another trust).”

(7) In paragraph 5(2), the “or” at the end of paragraph (a) is omitted, and after paragraph (a) there is inserted—

“(aa) remuneration paid in that year to persons providing additional pharmaceutical services (in accordance with directions under section 41A above), in respect of such of those services as are designated, or”.

(8) For paragraph 6 there is substituted—

“6 (1) For each financial year, the Secretary of State shall apportion, in such manner as he thinks appropriate, among all Primary Care Trusts the total of the remuneration referable to the cost of drugs which is paid by each Primary Care Trust in that year.

(2) A Primary Care Trust is accountable in any year for remuneration referable to the cost of drugs to the extent (and only to the extent) that such remuneration is apportioned to it under sub-paragraph (1) above.

(3) Where in any financial year any remuneration referable to the cost of drugs for which a Primary Care Trust is accountable is paid by another Primary Care Trust, the remuneration is to be treated (for the purposes of sections 97C and 97D above) as having been paid by the first trust in the performance of its functions.

(4) The Secretary of State may, in particular, exercise his discretion under sub-paragraph (1) above—

(a) so that any apportionment reflects, in the case of each Primary Care Trust, the financial consequences of orders for the provision of drugs, being orders which in his opinion are attributable to the trust in question,

(b) by reference to averaged or estimated amounts.

(5) The Secretary of State may make provision for any remuneration referable to the cost of drugs which is paid by a Primary Care Trust other than the trust which is accountable for the payment to be reimbursed in such manner as he may determine.”

(9) After paragraph 6 there is inserted—

“Local Health Boards: general Part 2 expenditure

6A (1) In section 97F above and this Schedule, general Part 2 expenditure, in relation to a Local Health Board, means expenditure of the Board which—

(a) is attributable to the payment of remuneration to persons providing services in pursuance of Part 2 of this Act, and

(b) is not excluded by sub-paragraph (2) below.

(2) Expenditure is excluded if it is attributable to—

(a) the reimbursement of expenses of persons providing services in pursuance of Part 2 which are designated expenses incurred in connection with the provision of the services (or in giving instruction in matters relating to the services),

(b) remuneration referable to the cost of drugs,

(c) remuneration paid to persons providing additional pharmaceutical services (in accordance with directions under section 41A above), in respect of such of those services as are designated, or

(d) remuneration of a designated description which is determined by the Board and paid to persons providing general medical services in pursuance of Part 2.

Local Health Boards: main expenditure

6B (1) In section 97F above, main expenditure, in relation to a Local Health Board and the year in question, means—

(a) expenditure of the Board mentioned in sub-paragraph (2) below,

(b) any other expenditure of the Board attributable to the performance of its functions in that year (other than general Part 2 expenditure and remuneration referable to the cost of drugs), and

(c) expenditure attributable to remuneration referable to the cost of drugs for which the Board is accountable in that year (whether paid by it or by another Board).

(2) The expenditure referred to in sub-paragraph (1)(a) above is expenditure attributable to—

(a) the reimbursement in that year of expenses of persons providing services in pursuance of Part 2 which are designated expenses incurred in connection with the provision of the services (or in giving instruction in matters relating to the services),

(b) remuneration paid in that year to persons providing additional pharmaceutical services (in accordance with directions under section 41A above), in respect of such of those services as are designated, or

(c) remuneration of a designated description which is determined by the Board and paid in that year to persons providing general medical services in pursuance of Part 2.

6C (1) For each financial year, the National Assembly for Wales shall apportion, in such manner as it thinks appropriate, among all Local Health Boards the total of the remuneration referable to the cost of drugs which is paid by each Local Health Board in that year.

(2) A Local Health Board is accountable in any year for remuneration referable to the cost of drugs to the extent (and only to the extent) that such remuneration is apportioned to it under sub-paragraph (1) above.

(3) Where in any financial year any remuneration referable to the cost of drugs for which a Local Health Board is accountable is paid by another Local Health Board, the remuneration is to be treated (for the purposes of sections 97F and 97G above) as having been paid by the first Board in the performance of its functions.

(4) The National Assembly for Wales may, in particular, exercise its discretion under sub-paragraph (1) above—

(a) so that any apportionment reflects, in the case of each Local Health Board, the financial consequences of orders for the provision of drugs, being orders which in the Assembly’s opinion are attributable to the Board in question,

(b) by reference to averaged or estimated amounts.

(5) The National Assembly for Wales may make provision for any remuneration referable to the cost of drugs which is paid by a Local Health Board other than the Board which is accountable for the payment to be reimbursed in such manner as the Assembly may determine.”

(10) In paragraph 7—

(a) in sub-paragraph (1)—

(i) in the definition of “designated”, after “Secretary of State” there is inserted “or, as the case may be, the National Assembly for Wales”, and

(ii) in the definition of “remuneration referable to the cost of drugs”, for “paragraph 1(2)(b)” there is substituted “paragraphs 1(2)(b), 4(2)(aa) and 6A(2)(b)”,

(b) in sub-paragraph (2), for “Health Authorities” there is substituted “Primary Care Trusts”, and at the end there is inserted “and the National Assembly for Wales shall make the corresponding determination in relation to Health Authorities and Local Health Boards.”, and

(c) in sub-paragraph (3)—

(i) for “Health Authorities” there is substituted “Primary Care Trusts”,

(ii) “or Primary Care Trust” is omitted, and

(iii) at the end there is inserted “, and the National Assembly for Wales may so treat all remuneration paid by Health Authorities to such persons, so far as it is so met.”

Quality

11 Duty of quality

In section 18 of the 1999 Act (duty of quality), in subsection (4), at the end of the definition of “health care” there is inserted “, and the environment in which such services are provided”.

12 Further functions of the Commission for Health Improvement

(1) Section 20 of the 1999 Act (functions of the Commission for Health Improvement) is amended as provided in subsections (2) to (4).

(2) In subsection (1)—

(a) in paragraph (d), for “particular types of health care” there is substituted “health care”,

(b) the “and” at the end of paragraph (d) is omitted, and

(c) after paragraph (d) there is inserted—

“(da) the function of conducting reviews of, and making reports on, the quality of data obtained by others relating to the management, provision or quality of, or access to or availability of, health care for which NHS bodies or service providers have responsibility, the validity of conclusions drawn from such data, and the methods used in their collection and analysis,”.

(3) After subsection (1) there is inserted—

“(1A) The functions of conducting reviews and of carrying out investigations include—

(a) the collection and analysis of data, and

(b) the assessment of performance against criteria.

(1B) Subject to any regulations under paragraph (d) of subsection (2), the Commission must publish at least a summary of each report it makes in the exercise of the functions conferred on it by or under this section and sections 21 and 22.”

(4) In subsection (2), for paragraph (d) there is substituted—

“(d) as to cases or classes of case in which the Commission must publish reports (and not just summaries),”.

(5) In section 33 of the Audit Commission Act 1998 (c. 18) (studies for improving economy etc in services), in subsection (6)(c), after “Secretary of State” there is inserted “, the Commission for Health Improvement”.

13 Commission for Health Improvement: inspections and investigations

(1) In section 20 of the 1999 Act (functions of the Commission for Health Improvement)—

(a) in subsection (1), after the paragraph (da) inserted by section 12 there is inserted—

“(db) the function of carrying out inspections of NHS bodies and service providers, and persons who provide or are to provide health care for which NHS bodies or service providers have responsibility, and making reports on the inspections, and”, and

(b) after the subsections (1A) and (1B) inserted by section 12 there is inserted—

“(1C) The inspections referred to in paragraph (db) of subsection (1) are to be carried out only in connection with the function referred to in paragraph (d) of that subsection.

(1D) If after carrying out—

(a) a review under subsection (1)(b),

(b) an investigation under subsection (1)(c),

(c) any function equivalent to one referred to in paragraph (a) or (b) prescribed under subsection (1)(e), or

(d) an inspection under subsection (1)(db),

the Commission is of the view referred to in subsection (1E) as to a body, service provider or other person reviewed, investigated or inspected (taking account, if appropriate, of any other relevant information the Commission may have), the Commission must make a report of its view to the Secretary of State.

(1E)